The election outcome is a transformation of our overweight stance on India, Raychaudhuri added.

“We did not change our Sensex target. It’s a definite choice, at expectation of a stable government in whichever form was already embedded in that assumption. The way the results came out, that kind of beat all expectations out of the park,” said Raychaudhuri.

“We have seen historically, both in terms of market behavior and in terms of flows, the euphoria and negative sentiment surrounding elections is really short term,” he added.

Raychaudhuri said the unexpected escalation in the US-China trade tension and continuation of the BJP regime in India seem to have overturned investors' relative preference among Asian markets.

“It certainly makes us more positive on the latter," he said referring to India.

"Law making could be easier for NDA-2.0 as it has more seats than in 2014, not only in the Lower House of Parliament, but also in Upper House," he said.

"We believe expectations of further structural reforms could surge going forward," he said.

However, he agreed that Indian market was overvalued.

“The perennial question; India remains overvalued. There is no doubt about that. In relative to Asia ex-Japan, India is one standard deviation higher than the long-term average,” he said,

He pointed that relative to its North Asian peers, India’s earnings trajectory seems better, and in contrast to the sharp downgrades that China, Korea and Taiwan have seen, India’s earnings trajectory seems to have stabilised, as the ongoing trade war impacts North Asia much more.